More recently, other US companies have been building up their manufacturing presence in India, despite the political tension
[DELHI] Ford Motor plans to invest about 32.5 billion rupees (S$477 million) in India to make new engines, a source familiar with the matter said, signalling renewed confidence in the country and defying Donald Trump’s promotion of American manufacturing as it reopens a factory closed four years ago.
The Maraimalai Nagar manufacturing site in the southern Indian state of Tamil Nadu will be retooled to make high-end engines for export markets with an annual capacity of over 200,000 units, said the source, asking not to be named as the plans are private. The engines will not be exported to the US, but it’s unclear which countries they will be sent to, the source said, adding an announcement is expected as early as this week.
The US automaker, which first signalled its interest in resuming local production in India a year ago, has been preparing the investment for months against a backdrop of heightened tensions between New Delhi and Washington. Trump placed a 50 per cent tariff on Indian imports earlier this year in a trade standoff, and has lashed out at the Asian country’s purchase of Russian oil.
The move comes even as Trump made boosting manufacturing in the US, especially where the automotive industry is concerned, a signature policy goal. Ford caught flack from the president during his first term for a plan to increase output outside the US, but more recently won praise from him after announcing major investments at its domestic plants.
Ford declined to comment.
Ford’s decision reflects renewed confidence in India as a manufacturing base from chief executive officer Jim Farley and comes as it pivots from a previous focus on electric vehicles. The Dearborn, Michigan-based company first set up manufacturing near Chennai in 1995 and added a second plant in Sanand, Gujarat, in 2015.
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Shortly after becoming CEO in 2020, Farley pulled the plug on a deal with Mahindra & Mahindra that would have kept Ford vehicles on Indian roads. He abandoned the market altogether less than a year later, saying it could no longer pour capital into marginal markets such as India and Brazil that provided little or no return.
By by the time it exited, Ford racked up losses totalling over US$2 billion. It ultimately sold off the Sanand vehicle plant to Tata Motors, which now builds EVs there. In 2020, Ford’s chief US rival, General Motors, also ceased production in India, three years after shifting to an export-only business model.
More recently, other US companies have been building up their manufacturing presence in India, despite the political tension. Trump singled out Apple in May for its decision to manufacture in India, but the tech giant has since ramped up iPhone production across five Indian factories.
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Tamil Nadu, where Ford plans to restart its old facility, is one of India’s largest industrialised states and a longtime automaking hub. It’s home to manufacturing facilities operated by Hyundai Motor, Renault, and BMW. BLOOMBERG
